Local Government

There are eleven (11) Local Governments in Ibadan Metropolitan area consisting of five urban local governments in the city and six semi-urban local governments in the less city. Local governments at present are institutions created by the military governments but recognised by the 1999 constitution and they are the third tiers of government in Nigeria.

The fiscal federalism approach treats local government as a subordinate tier in multitiered system and outlines principles for defining the roles and responsibilities of orders of governments.

Local governments Councils consist of the Executive Arm made up of the Executive Chairman, the vice chairman, the secretary and the supervisory councilors. The legislative arm coast of the councilors representing the 127 political wards each chairmaned by a leader and supported by other house officials while the Director of Personnel Management (DPM) serves as the clerk of the house.

There are six major departments in each local government which in turn are made up of divisions and sections. Various departments execute the policies and directives of the Executive. The senior staff members are employed and disciplined by the Local Government Service Commission (LGSC). The administrative departments are headed by a Director and include, Personnel Management; works, Housing and Survey; Finance and Supply; Educational and Health and environmental Services and Agriculture.

The Constitution of the Federal Republic of Nigeria, 1999, guarantees a ‘system of local
government by democratically elected local government councils’. Section 7(1) prescribed that
‘the Government of every State shall … ensure their existence under a Law which provides for
the establishment, structure, composition, finance and functions of such councils. The
Constitution, in section 7, provides that:

1. the National Assembly shall make provisions for statutory allocation of public revenue to
local government councils in the Federation

2. the House of Assembly of a State shall make provisions for statutory allocation of public
revenue to local government councils within the State.
The functions of the local government contained in the Fourth Schedule to the Nigerian
Constitution include:
a. Establishment, maintenance and regulation of slaughter houses, slaughter slabs, markets,
motor parks and public conveniences;
b. Construction and maintenance of roads, street lightings, drains and other public highways,
parks, gardens, open spaces, or such public facilities as may be prescribed from time to time
by the House of Assembly of a State;
c. Provision and maintenance of public conveniences, sewage and refuse disposal;
d. Collection of rates, radio and television licences;
e. Assessment of privately owned houses or tenements for the purpose of levying such rates as
may be prescribed by the House of Assembly of a State;
f. Control and regulation of outdoor advertising, restaurants, bakeries and other places of sale
of food to the public, and sale of liquor, and
g. In collaboration with the Government of a State, provides and maintain primary, adult and
vocational education, and health services;Revenue base of Local Government

The constitution of Nigeria determine function and revenue base for local governments in Nigeria while the state House of Assembly provides legal basis for collection of taxes, fees rates and charges constitutionally assigned to the local government. The revenue base common to all the 774 local governments in the country are: poll or community taxes, tenement rates, rents on property, licenses and fees income from investments or commercial undertakings, grants and transfers from state and federation Accounts and 10percent of the state government internally generated revenue (IGR).

Taxes on property (i.e. tenement rate) and licenses and fees form the backbone of the urban local governments revenue base. But local governments have shown preference for indirect taxes such as licenses, fees and levies over direct taxes such as property taxes, even when direct taxes are a suitable form of taxation because their incidence is localized.
Large cities and metropolitan areas are better able to levy taxes than smaller cities and rural local governments to the extent that urban local governments or metropolitan areas rely on property tax revenues. For example, more densely populated cities have a larger per capital tax base than smaller cities or rural areas, where property values are generally lower.
Moreover, since commercial and industrial properties are almost always taxed more than the residential properties, large cities withy a proportion of commercial and industrial properties have greater ability to levy property taxes.

Similarly, because of the higher level of economics activities, large cities and Metropolitan areas have greater ability to levy income and sales taxes and impose licenses and fees. Indeed, sales taxes are on way of capturing the benefits that commuters and visitors enjoy from using services in the municipal (see the table below)

The property tax is increasingly becoming important in Ibadan Metropolitan Area because the construction of economic and commercial property is fast increasing with a number of petrol filling stations, Commercial Banks, industries and shopping complexes dominating the property market thus increasing the number of high yielding taxable property. Hence, 75% of the State property tax revenue is generated from the eleven(11) local government areas of Ibadan.